President approves amendments in IBC Code; major beneficiaries home buyers and MSMEs
New Delhi, June 7 (KNN) The ordinance amending the Insolvency and Bankruptcy Code (IBC) 2018 has been approved by President Ram Nath Kovind.
The Ordinance provides significant relief to home buyers by recognizing their status as financial creditors.
According to government release, the provisions of amended IBC codes would give them due representation in the Committee of Creditors and make them an integral part of the decision making process.
It will also enable home buyers to invoke Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016 against errant developers,” a government release has said.
Further, acknowledging the importance of MSME sector in terms of employment generation and economic growth, the Ordinance empowers the Government to provide them with a special dispensation under the Code.
The immediate benefit it provides is that, it does not disqualify the promoter to bid for his enterprise undergoing Corporate Insolvency Resolution Process (CIRP) provided he is not a willful defaulter and does not attract other disqualifications not related to default.
It also empowers the Central Government to allow further exemptions or modifications with respect to the MSME Sector, if required, in public interest.
The Ordinance also provides for a mechanism to allow participation of security holders, deposit holders and all other classes of financial creditors that exceed a certain number, in meetings of the Committee of Creditors, through the authorized representation.